Pharmacies, physicians, hospitals, and other healthcare service entities typically transmit claims, such as medical insurance claims, to third party payers so that the healthcare entities can be reimbursed for expenses incurred in administering goods or services associated with medical care. For instance, where a consumer purchases pharmaceuticals through a pharmacy and that consumer's pharmaceutical purchase is covered at least in part by the consumer's insurance provider, the pharmacy will typically submit a claim to the consumer's insurance provider for reimbursement. Historically, claims were written by hand and mailed to payers, which would then process the claim and pay the claim-submitting entity. Over the past fifteen years the method of substituting claims to payers has evolved, with electronic claim submissions largely taking the place of handwritten claims. Electronic claims are preferable over handwritten claims because they eliminate the need to mail or fax claims, and increase the speed with which claims are processed. Additionally, electronic claims may be entered using a practice management system commonly used by pharmacies, physicians, hospitals, or the like, which can maintain records identifying each patient or consumer along with an historical account of the treatment, drugs, procedures and other pertinent information that may be useful for providing services or drafting future claims.
Currently, many healthcare providers use a virtual private network (VPN) technology to process claims whereby they use a third party provided VPN client-side application to establish a secure connection over a variety of links, after which claims are passed in one of a variety of formats, such as in clear-text format. However, VPN technology has a number of drawbacks. First, most VPN applications only support up to 64 bit security technology. Second, multiple layers of entities handle claim communications in such a system, including a practice management system, VPN client-side application, and the transport forwarding the claim to its ultimate destination. Third, claims are usually processed in batch form in which multiple claims are transmitted simultaneously, such as at the end of the day, which delays the processing of bills for services and goods for which a claim has been submitted.
Recently some systems have been created that allow a practice management system to process claims via the Internet. For example, XGear Technologies, Inc., offers ClaimGear, which is an Internet-based practice management system that allows for insurance claim entry and electronic submission of claims to a claim clearinghouse. ClaimGear includes a thin client application residing on a client computer, where the thin client communicates over the Internet with a data center. Each time a system user wishes to save data, such as a claim, the data is transmitted over the Internet and placed into the data center database. After a claim is entered, it is submitted to payers in batch form along with all claims that were entered that day. The claims are transmitted to payers using electronic claim files. More specifically, the electronic claim files are sent to a clearinghouse that forwards the claims onto the appropriate payers. The following morning the client can view and print the clearinghouse reports of accepted and rejected claims. Although ClaimGear does allow claims to be transmitted electronically over the Internet to a clearinghouse and on to payers, the ClaimGear system does not process claims in real-time, due in part to a lack of backend connectivity to the payers. Furthermore, because claims are submitted in batch form the practice management system and claim-submitter experience a long delay in being able to process bills for the goods and services. Additionally, the data center database must be configured to collect claims for later transmission in batch form to payers, which takes up storage space at the data center and requires the data center to store claim data for extended periods of time. Furthermore, the delay in receiving a response from a payer until all claims are submitted in a batch transaction may result in a next-day retransmission of the claim, which not only delays the processing of the claim but can serve to interrupt billing and practice management.
Therefore, what is needed is a method of communicating that allows security encryption, which handles claims on a claim by claim basis, and which obviates the handling of claims by multiple entities such that payers can process and respond to claims in real-time or near real-time. What is also needed is a client system that enables conventional practice management systems to be altered such that they can communicate claims over the an always-on connection, such as the Internet, in real-time or near real-time. What is further needed is a system and method that allows claim-submitting entities, such as medical providers, to complete medical and monetary transactions more quickly, thereby facilitating better service to consumers and providing medical providers the ability to collect outstanding monies and to assess their monetary positions. What is also needed is a claim processing system and method that negates the need of a system and hardware that stores multiple claims in memory for batch transmission to a clearinghouse or payer.